Debt & Taxes - One Might Be Avoidable!

Debt and Taxes

I know it is supposed to be death, but somebody else can talk about that. I am more interested in Debt. It is as unavoidable as we seem to think?

I’ve been reading a lot lately from financial planners, after years of hearing about it, payoff your credit card debt!

I totally agree with the philosophy of being out of credit card debt especially today as rates rise and the credit card companies are harder to deal with.

But for me the question always arises which do I payoff first?

A high balance card or a low balance card with a lower interest rate?

Conventional wisdom always says to get rid of the high rate card first and then go after the lower interest rates. While I agree with this on principle, I find that the never works that way! Mainly because my clients never feel like they are getting ahead!

To me the credit card debt is not only financial it is also very much emotional. I want my clients to have a win!

Hell I want a win too!

So my approach is a little different.

I advise my clients to get rid of one debt as fast as they can, even if it means paying off a low balance low interest rate card first. Then move to the next one that is easiest to pay off and so on.

With this plan in place, my clients start to feel the emotional side of having a win.

Remember money is emotional. Treat your money well and it will be there for you.

Another technique I use to get people in the habit of paying down their credit cards (and not using them in the future unless it is an emergency) is to pay off each new charge. The day you make it!

Get in the habit of each and every time you put a purchase on a credit card, that you go home, and now it is so easy with the internet, and pay off that exact amount (or hey, maybe 10 bucks more!) on your credit card account.

This way, you are really using cash and not increasing your credit card debt.

This is a discipline and I know that is seems tough to follow. But I am telling you if you practice the techniques I have outlined, you can and will have a win!